[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4640 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4640

To reduce the Nation's oil dependence and enhance the Nation's ability 
                     to produce alternative fuels.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 18, 2005

 Mr. Gerlach introduced the following bill; which was referred to the 
Committee on Energy and Commerce, and in addition to the Committees on 
 Ways and Means and Transportation and Infrastructure, for a period to 
      be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To reduce the Nation's oil dependence and enhance the Nation's ability 
                     to produce alternative fuels.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Future Fuels Act''.

      TITLE I--ADVANCED TECHNOLOGY MOTOR VEHICLE INVESTMENT CREDIT

SEC. 101. ADVANCED TECHNOLOGY MOTOR VEHICLE INVESTMENT CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business related 
credits) is amended by adding at the end the following new section:

``SEC. 45N. ADVANCED TECHNOLOGY MOTOR VEHICLE INVESTMENT CREDIT.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible manufacturer, the advanced technology motor vehicle investment 
credit determined under this section for any taxable year is an amount 
equal to 33 percent of the qualified investment of the taxpayer for 
such taxable year.
    ``(b) Limitation.--The amount of the credit determined under this 
section for any taxable year shall not exceed $200,000,000.
    ``(c) Eligible Manufacturer.--For purposes of this section--
            ``(1) In general.--The term `eligible manufacturer' means 
        any taxpayer if more than 25 percent of the taxpayer's gross 
        receipts for the taxable year are derived from the manufacture 
        of motor vehicles and component parts of such vehicles.
            ``(2) Requirement of improvement in average fuel economy.--
        Such term shall not include any manufacturer of motor vehicles 
        for any taxable year unless the average fuel economy of the 
        manufacturer for light duty vehicles (other than vehicles 
        produced with property described in subsection (d) which was 
        taken into account for purposes of determining a credit under 
        this section) for the most recent model year for which data is 
        available (determined as of the first day of such taxable year) 
        is not less than such average fuel economy for model year 2002. 
        Terms used in this paragraph which are also used in section 30B 
        shall have the same meaning as when used in such section.
    ``(d) Qualified Investment.--For purposes of this section--
            ``(1) In general.--The term `qualified investment' means 
        amounts paid or incurred by the taxpayer during the taxable 
        year--
                    ``(A) to re-equip or expand an existing 
                manufacturing facility of the eligible manufacturer to 
                produce advanced technology motor vehicles or to 
                produce eligible components, and
                    ``(B) for qualified engineering integration.
            ``(2) Attribution rule.--In the event a facility of the 
        taxpayer produces both advanced technology motor vehicles and 
        other property, or eligible components and other property, only 
        the qualified investment attributable to production of advanced 
        technology motor vehicles and eligible components shall be 
        taken into account for purposes of this section.
            ``(3) Property used outside united states, etc., not 
        qualified.--An amount shall not be treated as a qualified 
        investment if such amount is paid or incurred for property 
        referred to in section 50(b) or to the extent such amount is 
        taken into account under section 179.
            ``(4) Election.--An amount shall not be treated as a 
        qualified investment if the taxpayer elects that such amount 
        not be so treated.
    ``(e) Advanced Technology Motor Vehicles.--For purposes of this 
section--
            ``(1) In general.--The term `advanced technology motor 
        vehicle' means--
                    ``(A) any new advanced lean burn technology motor 
                vehicle (as defined in section 30B(c)(3), determined 
                without regard to subparagraph (A)(iv)(II) thereof and 
                without regard to the weight limitation under 
                subparagraph (A)(iv)(I) thereof), and
                    ``(B) any new qualified hybrid motor vehicle (as 
                defined in section section 30B(d)(3)(A), determined 
                without regard to clause (ii)(II) thereof and without 
                regard to the weight limitation under subparagraph 
                (ii)(I) thereof) that achieves at least 140 percent of 
                the 2002 model year city fuel economy (as defined in 
                section 30B(b)(2)(B)).
            ``(2) EPA emission standard requirements.--The term 
        `advanced technology motor vehicle' shall not include any 
        vehicle unless such vehicle is in compliance with any 
        Environmental Protection Agency emission standard for fine 
        particulate matter for the applicable make and model year of 
        the vehicle.
    ``(f) Eligible Components.--For purposes of this section, the term 
`eligible component' means any component specially designed for an 
advanced technology motor vehicle and installed for the purpose of 
meeting the performance requirements for such vehicle, including--
            ``(1) with respect to any gasoline-electric new qualified 
        hybrid motor vehicle (as so defined), an electric motor or 
        generator, power split device, power control unit, power 
        controls, integrated starter generator, or battery,
            ``(2) with respect to any advanced lean burn technology 
        motor vehicle (as so defined), a diesel engine, turbocharger, 
        fuel injection system, or after-treatment system such as a 
        particle filter or NO<INF>X</INF> absorber, and
            ``(3) any other component identified by the Secretary as an 
        eligible component.
    ``(g) Qualified Engineering Integration.--For purposes of this 
section, the term `qualified engineering integration' engineering tasks 
performed prior to the market introduction of an advanced technology 
vehicle which are related to--
            ``(1) incorporating eligible components into the design of 
        such vehicle, or
            ``(2) designing new tooling and equipment for facilities to 
        manufacture such vehicle or eligible components for such 
        vehicle.
    ``(h) Denial of Double Benefit.--In the case of the amount of the 
credit determined under this section--
            ``(1) no deduction or credit shall be allowed for such 
        amount under any other provision of this chapter, and
            ``(2) no increase in the adjusted basis of any property 
        shall result from such amount.
    ``(i) Aggregation and Allocation Rules.--For purposes of this 
section, rules similar to the rules of paragraphs (1) and (2) of 
section 41(f) shall apply.
    ``(j) Recapture.--The Secretary shall, by regulations, provide for 
recapturing any credit allowed under this section with respect to any 
qualified investment which ceases to be a qualified investment.
    ``(k) Termination.--No credit shall be allowed under this section 
with respect to any amount paid or incurred after December 31, 2015.''.
    (b) Credit Allowed as Part of General Business Credit.--Section 
38(b) of such Code is amended by striking ``plus'' at the end of 
paragraph (25), by striking the period at the end of paragraph (26) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(27) in the case of an eligible manufacturer (as defined 
        in section 45N(c)), the advanced technology motor vehicle 
        investment credit determined under section 45N(a).''.
    (c) Credit Allowed Against Net Income Tax.--Section 38(c) of such 
Code is amended by redesignating paragraphs (2) through (5) as 
paragraph (3) through (6), respectively, and by inserting after 
paragraph (1) the following new paragraph:
            ``(2) Special rules for advanced technology motor vehicle 
        investment credit.--In the case of the advanced technology 
        motor vehicle investment credit determined under section 
        45N(a)--
                    ``(A) this section and section 39 shall be applied 
                separately with respect to such credit, and
                    ``(B) in applying paragraph (1) to such credit--
                            ``(i) the amounts described in 
                        subparagraphs (A) and (B) of such paragraph 
                        shall be treated as being zero, and
                            ``(ii) the limitation under paragraph (1) 
                        (as modified by clause (i)) shall be reduced by 
                        the credit allowed under subsection (a) for the 
                        taxable year (other than the advanced 
                        technology motor vehicle investment credit 
                        determined under section 45N(a), the 
                        empowerment zone employment employment credit, 
                        the New York Liberty Zone business employee 
                        credit, or the specified credits).''.
    (d) Clerical Amendments.--
            (1) Section 1016(a) of such Code is amended by striking 
        ``and'' at the end of paragraph (36), by striking the period 
        and the end of paragraph (37) and inserting ``, and'', and by 
        adding at the end the following new paragraph:
            ``(38) to the extent provided in section 45N(h)(2).''.
            (2) Section 6501(m) of such Code is amended by inserting 
        ``45N(d)(4),'' after ``45C(d)(4),''.
            (3) The table of sections for subpart D of part IV of 
        subchapter A of chapter 1 of such Code is amended by adding at 
        the end the following new item:

``Sec. 45N. Advanced technology motor vehicle investment credit.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after December 31, 2004.

                         TITLE II--FUEL CHOICE

SEC. 201. FUEL ECONOMY CREDITS PROPORTIONAL TO ALTERNATIVE FUEL USED IN 
              DUAL FUEL VEHICLES.

    (a) Fuel Economy Calculations for Alternative Fuel Vehicles.--
Section 32905 of title 49, United States Code, is amended--
            (1) in subsections (b) and (d)--
                    (A) by amending paragraph (1) of each such 
                subsection to read as follows:
            ``(1) the number determined by--
                    ``(A) subtracting from 1.0 the alternative fuel use 
                factor; and
                    ``(B) dividing the number calculated under 
                subparagraph (A) by the fuel economy measured under 
                section 32904(c) when operating the model on gasoline 
                or diesel fuel; and''; and
                    (B) by amending paragraph (2) of each such 
                subsection to read as follows:
            ``(2) the number determined by dividing the alternative 
        fuel use factor by the fuel economy measured under subsection 
        (a) when operating the model on alternative fuel.''.
            (2) by adding at the end the following:
    ``(h) Determination of Alternative Fuel Use Factor.--
            ``(1) Definition.--For purposes of subsections (b) and (d), 
        the term `alternative fuel use factor' means the factor 
        determined by the Administrator under paragraph (3).
            ``(2) Aggregate amount of fuel.--At the beginning of each 
        calendar year, the Secretary of Transportation shall estimate 
        the aggregate amount of fuel and the aggregate amount of 
        alternative fuel used to operate all dual fuel automobiles 
        during the most recent 12-month period.
            ``(3) Determination of alternative fuel use factor.--The 
        Administrator shall determine, by regulation, the alternative 
        fuel use factor for dual fueled automobiles, on an energy 
        equivalent basis, by calculating the ratio that the amount of 
        alternative fuel used by each model bears to the total amount 
        of fuel used by such model.''.
    (b) Applicability of Existing Standard.--The amendments made by 
this section shall not affect the application of section 32901 of title 
49, United States Code, to automobiles manufactured before model year 
2007.
    (c) Effective Date.--The amendments made by this section shall take 
effect on January 1, 2007.

SEC. 202. FLEXIBLE FUEL VEHICLE STANDARDS.

    (a) Definitions.--In this section:
            (1) Alternative fuel; alternative fueled automobile; 
        automobile.--The terms ``alternative fuel'', ``alternative 
        fueled automobile'', and ``automobile'' have the meanings given 
        such terms in section 32901 of title 49, United States Code.
            (2) Flexible fuel vehicles.--The term ``flexible fuel 
        vehicle'' means a light duty motor vehicle warranted by the 
        manufacturer to operate using gasoline and 1 or more 
        alternative fuels, including ethanol and methanol in blends up 
        to 85 percent alternative fuel by volume.
    (b) Increasing Percentage of Alternative Fueled Automobiles or 
Flexible Fuel Vehicles.--
            (1) In general.--Of the new automobiles sold by a 
        manufacturer in the United States--
                    (A) not less than 10 percent manufactured by that 
                manufacturer for model year 2009 shall be alternative 
                fueled automobiles or flexible fuel vehicles;
                    (B) not less than 20 percent manufactured by that 
                manufacturer for model year 2010 shall be alternative 
                fueled automobiles or flexible fuel vehicles;
                    (C) not less than 35 percent manufactured by that 
                manufacturer for model year 2011 shall be alternative 
                fueled automobiles or flexible fuel vehicles; and
                    (D) not less than 50 percent manufactured by that 
                manufacturer for model year 2012, and each year 
                thereafter, shall be alternative fueled automobiles or 
                flexible fuel vehicles.
            (2) Rulemaking.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary of Transportation shall 
        issue regulations to carry out this subsection.
    (c) Alternative Fuel Retail Outlets.--
            (1) Requirement.--Beginning in the first year in which 10 
        percent or more of the registered vehicles in a county are 
        capable of using an alternative fuel, each retail motor fuel 
        outlet in that county with 10 or more vehicle fuel pumps shall 
        offer such alternative fuel at not less than 10 percent of such 
        pumps.
            (2) Credits.--A retail motor fuel outlet shall be in 
        compliance with the requirement under paragraph (1) if a 
        sufficient number of credits have been purchased for it from 
        another retail motor fuel outlet that operates more than the 
        minimum required number of alternative fuel pumps, and is 
        within 20 miles of the purchasing retail motor fuel outlet.
            (3) Projections.--Not later than July 1st of each year, the 
        Secretary of Energy shall--
                    (A) identify the counties in which at least 10 
                percent of the registered vehicles are expected to be 
                capable of using a designated alternative fuel within 
                the following 18-month period;
                    (B) notify owners and operators of retail motor 
                fuel outlets in the counties identified under 
                subparagraph (A) of the alternative fuel pump 
                requirement under this subsection; and
                    (C) grant counties an exemption to the requirement 
                in paragraph (1) if they demonstrate to the Secretary 
                that there is not an adequate alternative fuel supply 
                to meet the requirement.
            (4) Rulemaking.--The Secretary of Energy shall issue 
        regulations to carry out this subsection.

                       TITLE III--FUEL EFFICIENCY

SEC. 301. OIL SAVINGS STUDIES.

    (a) In General.--The Secretary of Transportation shall develop and 
implement pilot projects the purpose of which is to reduce vehicle 
miles traveled.
    (b) Highway Congestion Tolling Evaluation Study.--The Secretary 
shall carry out evaluation projects in no less than 6 metropolitan 
areas selected by the Secretary to determine how technology can best be 
applied to assess mileage-based road user charges on major highways at 
peak-commuting times for the purposes of--
            (1) reducing oil usage;
            (2) lessening highway congestion; and
            (3) expanding travel alternatives.
    (c) Parking Cash-Out Evaluation Project.--
            (1) In general.--The Secretary shall carry out a national 
        evaluation pilot project to assess how offering commuters the 
        option to receive the cash value of their workplace parking 
        place, if any, instead of free parking can--
                    (A) reduce oil usage;
                    (B) lessen highway congestion; and
                    (C) expand travel alternatives
            (2) Employer requirement.--Under the evaluation pilot 
        project, any employer that is participating in the pilot 
        project and offers free-of-charge commuter parking to the 
        employees of the employer must also offer a cashout alternative 
        to employees.
    (d) Report.--The Secretary shall submit to Congress every 2 years 
after the date of the enactment of this Act, a report on the progress 
and results of pilot projects under this section. The report shall 
provide an analysis and summary of project implementation, changes in 
oil usage and travel demand, and other matters as deemed appropriate by 
the Secretary.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out subsection (b) $4,000,000, and to carry out 
subsection (c) $4,000,000, for each of fiscal years 2007 through 2016.

SEC. 302. INSURANCE SAVINGS INCENTIVE PROGRAM.

    (a) Per-Mile Insurance.--The Secretary of Transportation shall 
establish a program to provide incentives to insurance providers to 
sell automobile insurance policies on a per-mile basis.
    (b) Incentives.--
            (1) Start-up costs.--Under the program, the Secretary of 
        Transportation shall assist automobile insurance providers with 
        the development and startup costs necessary to offer customers 
        of such providers the option of purchasing automobile insurance 
        at a per-mile-driven rate.
            (2) Per-mile compensation.--Under the program, the 
        Secretary of Transportation shall compensate an insurance 
        provider at the rate of one cent per mile driven by each 
        passenger vehicle for which the insurance premiums are 
        determined by the insurance provider to be the multiplicative 
        product of a per-mile-driven rate and a variable number of 
        miles driven. Such per-mile-driven rate may reflect both 
        traditional underwriting factors and the coverages selected. An 
        insurance provider may only receive incentive payments for an 
        insurance policy under this section if the per-mile-driven 
        premium charges on such policy apply to all vehicles of a 
        household insured by such provider and account for at least 70 
        percent of the total premium charge for liability and collision 
        coverages of each vehicle insured by such provider.
    (c) Authorization of Appropriations.--
            (1) Administrative costs.--There is authorized to be 
        appropriated for the administrative costs of the program 
        established under subsection (a) $10,000,000.
            (2) Start-up costs.--There is authorized to be appropriated 
        to fund start-up costs under subsection (b)(1) $20,000,000.
            (3) Per-mile compensation.--There is authorized to be 
        appropriated to fund incentives under subsection (b)(2) 
        $220,000,000.
            (4) Availability.--Funds appropriated under this subsection 
        shall remain available until expended.

SEC. 303. TRANSIT-ORIENTED DEVELOPMENT CORRIDORS.

    (a) Definitions.--In this section the following definitions apply:
            (1) Definitions from title 49, united states code.--The 
        terms ``capital project'', ``local governmental authority'', 
        ``mass transportation'', and ``urbanized area'' have the 
        meanings such terms have under section 5302 of title 49, United 
        States Code.
            (2) State.--The term ``State'' means a State of the United 
        States, the District of Columbia, Puerto Rico, the Northern 
        Mariana Islands, Guam, American Samoa, and the United States 
        Virgin Islands.
            (3) Transit-oriented development corridor.--The term 
        ``transit-oriented development corridor'' means rights-of-way 
        for fixed-guideway mass transportation facilities, including 
        commercial development that is connected with any such facility 
        physically and functionally.
    (b) In General.--In consultation with State transportation 
departments and metropolitan planning organizations, the Secretary 
shall designate, in urbanized areas, at least 20 transit-oriented 
development corridors by 2015 and 50 transit-oriented development 
corridors by 2025.
    (c) Transit Grants.--The Secretary shall award grants to a State or 
local governmental authority to construct or improve transit 
facilities, bicycle transportation facilities, and pedestrian walkways 
in transit-oriented development corridors, including capital projects.
    (d) Research and Development.--In order to support effective 
deployment of grants and incentives under this section, the Secretary 
shall establish a transit-oriented development corridors research and 
development program for the conduct of research on best practices and 
performance criteria for transit-oriented development corridors.
    (e) Authorization of Appropriations.--There are authorized to be 
appropriated to carry out this section $500,000,000 for each of fiscal 
years 2007 through 2016, of which $2,000,000 per fiscal year is 
authorized for the research and development program under subsection 
(d).
    (f) Labor Standards.--The Secretary shall not provide a grant under 
this section for a transit project unless the Secretary receives 
reasonable assurances from a State that laborers and mechanics employed 
by contractors or subcontractors in the performance of construction or 
modernization on the transit project will be paid wages not less than 
those prevailing on similar construction or modernization in the 
locality as determined by the Secretary of Labor under the Act of March 
3, 1931 (known as the Davis-Bacon Act) (40 U.S.C. 276a et seq.).

SEC. 304. MOTOR VEHICLE TIRES SUPPORTING MAXIMUM FUEL EFFICIENCY.

    (a) Standards for Tires Manufactured for Interstate Commerce.--
Section 30123 of title 49, United States Code, is amended--
            (1) in subsection (b), by inserting after the first 
        sentence the following: ``The grading system shall include 
        standards for rating the fuel efficiency of tires designed for 
        use on passenger cars and light trucks.''; and
            (2) by adding at the end the following:
    ``(d) National Tire Fuel Efficiency Program.--(1) The Secretary 
shall develop and carry out a national tire fuel efficiency program for 
tires designed for use on passenger cars and light trucks.
    ``(2) The program shall include the following:
            ``(A) Policies and procedures for testing and labeling 
        tires for fuel economy to enable tire buyers to make informed 
        purchasing decisions about the fuel economy of tires.
            ``(B) Policies and procedures to promote the purchase of 
        energy-efficient replacement tires, including purchase 
        incentives, website listings on the Internet, printed fuel 
        economy guide booklets, and mandatory requirements for tire 
        retailers to provide tire buyers with fuel-efficiency 
        information on tires.
            ``(C) Minimum fuel economy standards for tires, promulgated 
        by the Secretary.
    ``(3) The minimum fuel economy standards for tires shall--
            ``(A) ensure, in conjunction with the requirements under 
        paragraph (2)(B), that the average fuel economy of replacement 
        tires is equal to or better than the average fuel economy of 
        tires sold as original equipment;
            ``(B) secure the maximum technically feasible and cost-
        effective fuel savings;
            ``(C) not adversely affect tire safety;
            ``(D) not adversely affect the average tire life of 
        replacement tires;
            ``(E) incorporate the results from--
                    ``(i) laboratory testing; and
                    ``(ii) to the extent appropriate and available, on-
                road fleet testing programs conducted by the 
                manufacturers; and
            ``(F) not adversely affect efforts to manage scrap tires.
    ``(4) The policies, procedures, and standards developed under 
paragraph (2) shall apply to all types and models of tires that are 
covered by the uniform tire quality grading standards under section 
575.104 of title 49, Code of Federal Regulations (or any successor 
regulation).
    ``(5) Not less often than every three years, the Secretary shall 
review the minimum fuel economy standards in effect for tires under 
this subsection and revise the standards as necessary to ensure 
compliance with requirements under paragraph (3). The Secretary may 
not, however, reduce the average fuel economy standards applicable to 
replacement tires.
    ``(6) Nothing in this chapter shall be construed to preempt any 
provision of State law relating to higher fuel economy standards 
applicable to replacement tires designed for use on passenger cars and 
light trucks.
    ``(7) Nothing in this chapter shall apply to--
            ``(A) a tire or group of tires with the same SKU, plant, 
        and year, for which the volume of tires produced or imported is 
        less than 15,000 annually;
            ``(B) a deep tread, winter-type snow tire, space-saver 
        tire, or temporary use spare tire;
            ``(C) a tire with a normal rim diameter of 12 inches or 
        less;
            ``(D) a motorcycle tire; or
            ``(E) a tire manufactured specifically for use in an off-
        road motorized recreational vehicle.
    ``(8) In this subsection, the term `fuel economy', with respect to 
tires, means the extent to which the tires contribute to the fuel 
economy of the motor vehicles on which the tires are mounted.''.
    (b) Conforming Amendment.--Section 30103(b) of title 49, United 
States Code, is amended in paragraph (1) by striking ``When'' and 
inserting ``Except as provided in section 30123(d) of this title, 
when''.
    (c) Time for Implementation.--The Secretary of Transportation shall 
ensure that the national tire fuel efficiency program required under 
subsection (d) of section 30123 of title 49, United States Code (as 
added by subsection (a)(2)), is administered so as to apply the 
policies, procedures, and standards developed under paragraph (2) of 
such subsection (d) beginning not later than March 31, 2008.
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